Three years ago, two friends scribbled down an ambitious plan on a napkin in a tea shop: to make crypto environmentally friendly.
That idea became 5ire, a company that’s announced $221m in funding since launching in August 2021; claims a unicorn valuation; and even convinced football legend Didier Drogba and a member of the Norwegian parliament to join its advisory board.
Riding off 5ire’s quick-fire success, the two friends and founders, Pratik Gauri and Prateek Dwivedi, have been pictured rubbing shoulders with Barack Obama, Al Gore and Cathie Wood of Ark Invest.
But insiders tell Sifted that two of the announced $100m fundraises never actually hit 5ire’s bank account — with one of the deals collapsing because of the criminal past of an investor. That spooked some of its earliest investors, who asked for their money back and prompted its advisory board to quit.
Meanwhile, 5ire continues to plug its cryptocurrency and tease the upcoming launch of its blockchain.
5ire’s goal
5ire’s goal is to develop a blockchain to host environmentally-friendly projects, such as carbon credits or ESG data — and a corresponding cryptocurrency to allow people to back those projects. It’s an endeavour the company terms “the 5th Industrial Revolution”.
After coming up with the initial idea for 5ire, Gauri and Dwivedi brought on board Finnish web3 veteran Vilma Mattila as a third cofounder. She’d previously founded her own crypto investment firm, Node Kapital, advised an EU-backed blockchain initiative, according to her LinkedIn profile and spoken at tech conferences WebSummit and Slush.
Gauri previously founded a glassware company in India — and was also recognised by BP as a rising leader in sustainability. Dwivedi, meanwhile, previously founded a marketing agency, according to his LinkedIn.
The trio founded 5ire in London, before moving the company to Dubai in 2022. A person who works in the crypto industry in Dubai met the three founders on a yacht just after they’d moved. “They were talking the big game,” he says. “There’s a lot of that in crypto, particularly in Dubai.”
To get their grand plans off the ground, 5ire put a lot of emphasis on PR and marketing. The company sponsored a lounge at Davos and began running an “ambassador program” — which continues today — where crypto influencers get 5ire tokens in exchange for posting about it on social media. Twitter is awash with #5ire posts.
The missing millions: part 1
Crypto companies tend to raise early money from pre-sales of their tokens. Instead of giving early investors shares, they give them the right to buy tokens at a lower cost than when they eventually launch on a crypto exchange.
In November 2021, 5ire announced it had raised $21m via a token pre-sale. Investors included individual crypto investors, plus crypto-focused VC funds Alphabit, Marshland Capital, Launchpool Lab and Moonrock Capital.
Then, in February 2022, 5ire announced it had secured a $100m “capital commitment” from Global Emerging Markets (GEM), which describes itself on its website as a $3.4bn alternative investment group. Addresses listed on its website include Paris, New York and the Bahamas.
"This infusion of capital from GEM is aligned with 5ire's vision of going public,” Gauri told India’s Economic Times at the time, touting an IPO for the one-year-old company. The article didn’t give a timeline for its expected listing.
Fast forward just five months and 5ire had gone quiet about GEM’s investment. In July 2022 the company announced it had secured another $100m deal. But its press release made no mention of the earlier investment from GEM — only referencing its $21m seed round in its funding history.
Asked about the deal by Sifted in August 2024, 5ire said it “chose not to move forward with the GEM deal” because it had made the “strategic decision not to pursue an IPO at that time” which made it necessary, the spokesperson said, to withdraw from the deal. The company did not elaborate on why its IPO plans were shelved.
GEM did not respond to requests for comment.
The missing millions: part 2
As for the next $100m it announced, that came from a UK-headquartered conglomerate called Sram & Mram — and gave 5ire a whopping $1.5bn valuation; news that was widely reported by the crypto press.
5ire told Sifted Sram & Mram had undergone an “independent analysis” that took into account the pending patents, innovation and “the market size of the ESG and web3 market” to reach that valuation. The patents relate to 5ire's blockchain technology, the company said.
Sram & Mram is chaired by investor Sailesh Hiranandani, whose LinkedIn says he’s worked as a commodities trader and hedge fund manager. He was previously convicted on five charges of fraud in Hong Kong in 2010 and another in New Zealand in 2000. Hiranandani did not respond to multiple requests for comment.
A person who formerly worked in a senior capacity within 5ire said they never personally saw evidence of the $100m from Hiranandani’s Sram & Mram.
“They [5ire] couldn’t give us any evidence of the valuation or the investment,” a former advisor added.
5ire told Sifted it had chosen to return the money given to it by Sram & Mram after learning about Hiranandani’s convictions. “We came to know of the charges after the deal was concluded,” a spokesperson told Sifted, adding that the first tranche of funding had been given “via cheque” but was returned six months after it was received.
The board departs
In the summer of 2022, after the Sram & Mram deal, the company’s entire advisory board quit, two sources told Sifted, after 5ire failed to give them financial updates.
5ire told Sifted it was a challenging time for the industry and that some people were “sceptical” of its ability to build the blockchain technology it had promised.
Sifted reached out to six people listed on the company’s board at the time. One denied being an advisor; another said they did not have an official relationship with the company; and a third said they “do not want to be associated with them by any means”.
“We provide regular updates to our community and our advisors,” 5ire told Sifted. “The advisors we wanted are still with us. Those who weren’t able to add strategic value are no longer with us.”
Sifted contacted Drogba, who is currently listed as an advisor on 5ire website, via his agent — but did not receive a response.
“I got my money back because I was aggressive”
After the board quit, the company repeatedly delayed the launch of its blockchain, causing some of the investors who had backed 5ire in its $21m seed round to get itchy.
5ire had initially said it would launch its blockchain in November 2022. It didn’t. The launch was then planned for the third quarter of 2023 — and still didn’t happen.
The delay, combined with growing concern that 5ire’s two $100m deals hadn’t hit its bank account, led some investors to ask for their cash back, says one person who invested in the seed round. “I looked up GEM and they didn’t look real,” says the investor — adding that Sram & Mram and Hiranandani’s background also caused him concern. “I got my money back, because I was aggressive,” he adds.
“There were a lot of people who wanted their money back, a lot, I’d say 80%,” says one person who used to work at 5ire. Investors were contacting 5ire, sending emails and some even engaged lawyers, the person said. “99% didn’t get refunded.”
“Millions [of investors’ money] have been lost,” says a former advisor.
5ire told Sifted that 20% of its “200+” investors asked for refunds in mid-2023, “because they thought we would not be able to list the token on a crypto exchange”. However, the token was eventually listed in December 2023, so no refunds were issued.
So what now?
5ire’s blockchain, meanwhile, launched on testnet — a way to test new blockchains without financial risk — in November 2022. A closed beta version of its “mainnet”, where only invited participants are allowed to transact on the 5ire blockchain, emerged in July this year. Currently, there are less than 400 accounts using the blockchain.
Despite the delays, 5ire’s team is bullish about the future of the company. “All the promises 5ire made in 2021 have been delivered,” a spokesperson said. “5ire will continue to strive until the final goal is met: the 5th Industrial Revolution, impacting over 1 billion people using layer 1 web3 sustainable infrastructure.”
It’ll do that with one less cofounder: Vilma Mattila left the company last year due to a “difference in vision,” a 5ire spokesperson told Sifted. Its team now stands at 28 people.
In recent months, CEO Gauri embarked on a “@5irechain world tour 2024,” involving trips to London private members’ club Annabel’s and even a photo opp with Bollywood superstar Salman Khan: 5ire’s celebrity networking operation continues in full force.
This article was updated on 8th August 2024 to include the nature of 5ire's patents.
